S&P Global slashed Russia’s credit rating on Friday for the second time in a week, stating that recent capital controls measures are increasingly likely to cause a default.
The sovereign is now rated CCC-, for both its local-currency and dollar debt. That is two notches above a default level.
A week ago, Russia was rated investment grade. The speed of its descent into the deepest levels of junk status is unprecedented, according to an S&P spokesperson.
The Russian central bank imposed capital-control measures earlier this week, including a ban on coupon payments to foreign bondholders. It instructed depositories and registrars, key components of the financial infrastructure between issuers and investors, not to make transfers to foreign clients.